English only · Odia translation in progress

Chapter 1: The Tonne’s Journey — From Pit to Product

In January 2024, a truck carrying iron ore left the Joda-Barbil mining belt in Keonjhar district, Odisha. The ore — roughly 62% Fe grade, classified as calibrated lump — was worth approximately Rs 4,200 per tonne at the mine gate. That specific tonne of iron ore was heading south to a pellet plant near Kalinganagar, where it would be crushed, ground, mixed with bentonite binder, and rolled into marble-sized spheres in a disc pelletizer. The pellets — uniform, high-grade, optimized for furnace feed — would be worth roughly Rs 8,500 per tonne. A doubling of value for a process that takes about four hours.

But the pellets were not staying in Odisha either. They would travel by rail to an integrated steel plant in Jharkhand, where they would be fed into a blast furnace alongside metallurgical coke, heated to 1,500°C, and reduced to molten pig iron. The pig iron would be refined in a basic oxygen furnace, alloyed with precise quantities of carbon, manganese, and silicon, and continuously cast into slabs. Those slabs — crude steel — would be worth roughly Rs 35,000-38,000 per tonne. Then the slabs would pass through a hot strip mill, emerging as Hot Rolled Coil at Rs 48,000-55,000 per tonne. If the customer needed it, the coil would be cold-rolled, annealed, and galvanized, reaching Rs 60,000-70,000 per tonne. And if the end use was automotive body panels or structural components for a Hyundai rolling off the Sriperumbudur line near Chennai, the final value of that steel — processed, formed, quality-certified, delivered just-in-time — would exceed Rs 80,000-90,000 per tonne.

A tonne that left Odisha at Rs 4,200 became a product worth Rs 80,000-90,000 by the time it reached a car factory in Tamil Nadu. A value multiplication of roughly 18-20x. And Odisha’s share of that multiplication was the first step — the Rs 4,200 mine-gate sale plus royalties amounting to roughly Rs 630 per tonne.

This chapter traces the journey of each of Odisha’s major minerals from pit to finished product. Not to argue that Odisha should be doing all these steps — that argument comes later. But to establish, with precise numbers, where value gets created in each chain. Because you cannot have an honest conversation about what Odisha is missing if you do not first understand what happens to a tonne of rock after it leaves the state.

Iron Ore to Steel: The 18x Staircase

Iron ore is Odisha’s signature mineral — 28 percent of India’s reserves, concentrated in the Barbil-Joda belt of Keonjhar, the Bonai range in Sundargarh, and deposits in Mayurbhanj and Jajpur. The state produced approximately 130-140 million tonnes in FY 2023-24, making it India’s largest iron ore producing state. Most of this ore left the state as raw material or, at best, as pellets.

The journey from ore to finished steel involves six distinct stages, each adding value through progressively more complex industrial processes.

Stage 1: Mining and Beneficiation

Iron ore comes out of the ground in two forms: lumps (sized pieces, typically 10-40mm) and fines (particles below 10mm). Odisha’s iron ore ranges from 56% to 66% Fe content, with the best grades — hematite lumps from the Joda-Barbil belt — commanding premium prices.

Mine-gate prices (FY 2024-25, approximate):

High-grade lumps (Fe 65%+): Rs 5,500-6,500 per tonne
Medium-grade lumps (Fe 62-63%): Rs 3,800-4,500 per tonne
Fines (Fe 62%+): Rs 3,200-3,800 per tonne
Low-grade fines (Fe 56-58%): Rs 1,800-2,500 per tonne

The first value-addition step is beneficiation — washing, jigging, magnetic separation, or flotation to upgrade low-grade ore to furnace-acceptable grades. A beneficiation plant takes ore at 56-58% Fe and upgrades it to 62-64% Fe, effectively converting unsaleable material into furnace-ready feed. The investment is modest — Rs 100-300 crore for a 2-5 MTPA plant — and the value uplift is immediate: a tonne of ore worth Rs 1,800 becomes worth Rs 3,500-4,000 after beneficiation.

Odisha has built some beneficiation capacity, particularly around the Keonjhar mining corridor. But a significant portion of the state’s output still leaves as unbeneficiated fines, the lowest-value form of iron ore.

Stage 2: Pelletization

Fines cannot be directly fed into a blast furnace — they would clog the air flow and reduce efficiency. They must first be agglomerated into pellets or sinter. Pelletization is the process of grinding iron ore fines to a fine powder (80% passing 200 mesh), mixing with a binder (usually bentonite, about 0.5-1% by weight), forming green pellets in a disc or drum pelletizer, and then induite-hardening them in a traveling grate or grate-kiln at 1,200-1,350°C.

Pellet prices (FY 2024-25):

Blast furnace grade pellets (Fe 63-64%): Rs 7,500-9,000 per tonne
DR-grade pellets (Fe 67%+, low gangue): Rs 9,000-11,000 per tonne

The value multiplication from fines to pellets is approximately 2-2.5x. A pellet plant processing 2 MTPA costs roughly Rs 800-1,200 crore, with operating costs dominated by energy (coal or gas for the kiln) and iron ore fines as feedstock.

Odisha has significant pellet capacity — JSPL’s 9 MTPA plant at Angul, Essar Steel’s (now ArcelorMittal Nippon Steel) operations, and several smaller plants. Total pellet capacity in the state exceeds 30 MTPA. But this is still a fraction of the ore produced, and critically, most pellets are shipped out of state to feed furnaces in Jharkhand, Chhattisgarh, Karnataka, and even exported through Paradip port.

Stage 3: Iron-Making — DRI and Blast Furnace

This is where the chemistry happens. Iron ore is reduced — its oxygen is stripped away — to produce metallic iron. Two competing routes exist.

The Blast Furnace Route (BF): The traditional method. Iron ore (lumps, pellets, or sinter) is loaded into a vertical shaft furnace along with metallurgical coke (purified coal) and limestone flux. Hot air is blasted through from below at 1,000-1,200°C. The coke burns, generating carbon monoxide, which reduces the iron oxide. The result: molten pig iron at 1,500°C, containing about 4% carbon, plus slag.

The blast furnace is the heart of integrated steelmaking. It is also the most capital-intensive stage. A modern blast furnace complex with a capacity of 3-5 MTPA costs Rs 15,000-25,000 crore — and that is just the furnace and its support systems (coke ovens, sinter plant, hot blast stoves, gas cleaning). The entire integrated steel plant, from raw material handling to finished product, can cost Rs 30,000-50,000 crore for a 5 MTPA facility.

Pig iron prices: Rs 32,000-38,000 per tonne (FY 2024-25)

The DRI/Sponge Iron Route: Direct Reduced Iron is produced by reducing iron ore with coal or natural gas in a rotary kiln or shaft furnace at lower temperatures (900-1,100°C). The product is solid, porous, metallic iron — “sponge iron” — containing 85-93% metallic iron.

DRI is the poor man’s route to steelmaking, and India is the world’s largest producer. The capital cost is dramatically lower: a 0.5 MTPA coal-based DRI plant costs Rs 200-400 crore. But the product is also worth less — Rs 25,000-32,000 per tonne — and the process is energy-inefficient and polluting. Coal-based DRI plants, concentrated in Chhattisgarh, Odisha, and Jharkhand, are among the most polluting industrial facilities in India.

Sponge iron/DRI prices: Rs 25,000-32,000 per tonne (FY 2024-25)

Odisha has significant DRI capacity — dozens of coal-based sponge iron plants, particularly around Jharsuguda, Sambalpur, and Keonjhar. But blast furnace capacity — the route to higher-quality steel — is limited. JSPL’s Angul plant and Tata Steel’s Kalinganagar plant are the major integrated facilities. The state’s total crude steel capacity of approximately 20-22 MTPA remains well below its iron ore production capacity, meaning most ore still leaves for processing elsewhere.

Stage 4: Steel-Making

Pig iron from a blast furnace contains too much carbon (4%) for most applications. It must be refined. In a Basic Oxygen Furnace (BOF), molten pig iron is poured into a converter, oxygen is blown through the melt at supersonic speed, and the carbon burns off in a spectacular shower of sparks. The process takes about 40 minutes and produces crude liquid steel with carbon content below 0.1%.

DRI, being solid, is melted in an Electric Arc Furnace (EAF) — a giant steel pot with graphite electrodes that generate an electric arc at 3,000°C. Scrap steel can also be melted in EAFs. The EAF route is more flexible, requires less capital, and can operate at smaller scale, but it needs reliable, cheap electricity — 400-500 kWh per tonne of steel.

In both routes, the liquid steel is then refined in a ladle furnace or vacuum degasser, where precise alloy additions (manganese, chromium, nickel, vanadium, niobium — depending on the desired grade) create the specific steel composition required. This is metallurgy as chemistry: parts per million matter.

Crude steel / billet prices: Rs 35,000-42,000 per tonne (FY 2024-25)

Stage 5: Rolling — Where Shape Creates Value

Crude steel in slab form has limited utility. It must be shaped. This is the domain of the rolling mill, one of the most capital-intensive and technically demanding stages in the steel value chain.

Hot Rolling: Steel slabs are reheated to 1,200-1,300°C in a walking beam furnace and then passed through a sequence of roughing and finishing mills — massive rolling stands that progressively thin the slab from 200-250mm to 1.5-25mm while traveling at speeds up to 15 metres per second. The product — Hot Rolled Coil (HRC) — is the workhorse of the steel industry. Construction, shipbuilding, pipelines, pressure vessels, general engineering — all consume HRC.

HRC prices: Rs 48,000-55,000 per tonne (FY 2024-25)

Cold Rolling: HRC destined for applications requiring thinner gauges, tighter tolerances, and better surface finish enters a cold rolling mill. The strip is pickled (acid-washed to remove scale), then rolled at room temperature through high-precision stands to thicknesses as low as 0.15mm. Cold rolling increases the steel’s strength through work hardening but makes it brittle, so it is then annealed (heat-treated) to restore ductility.

CRC prices: Rs 58,000-68,000 per tonne (FY 2024-25)

Stage 6: Finishing — The Last Mile of Value

The final value additions push steel into specialty territory:

Galvanizing: CRC is coated with zinc (hot-dip galvanizing or electrogalvanizing) to prevent corrosion. Galvanized steel is essential for automotive, appliances, and construction.

Galvanized steel prices: Rs 62,000-75,000 per tonne

Colour coating: Galvanized steel is painted with polyester, PVDF, or other polymer coatings for roofing, cladding, and appliance panels.

Tinplating: CRC is coated with tin for food cans and packaging.

Automotive-grade steel: The most demanding application. Body panels for cars require steel that is simultaneously strong (to pass crash tests), formable (to stamp into complex shapes), corrosion-resistant (to survive decades of road salt), and aesthetically perfect (surface quality visible through paint). Automotive-grade steel — Advanced High Strength Steel (AHSS), dual-phase steel, bake-hardening steel — commands premiums of Rs 70,000-90,000+ per tonne.

The full multiplier: From mine-gate iron ore at Rs 4,000-4,500 per tonne to automotive-grade finished steel at Rs 80,000-90,000 per tonne, the value multiplication is approximately 18-22x. Odisha captures the first step — roughly 5% of the final product’s value.

Bauxite to Aluminium: The Energy Equation

If the iron ore value chain is about industrial scale and capital intensity, the aluminium value chain is about energy. Aluminium is sometimes called “solidified electricity” because the smelting process — converting alumina powder into liquid aluminium metal — consumes roughly 13,000-15,000 kilowatt-hours per tonne. That is enough electricity to power an average Indian household for ten years.

This single fact — the extreme energy intensity of aluminium smelting — explains the entire geography of India’s aluminium industry, including a decision that has shaped Odisha’s industrial landscape for four decades.

The Bauxite

Odisha holds 51 percent of India’s bauxite reserves, concentrated in the Eastern Ghats highlands of Koraput, Rayagada, and Kalahandi. The Panchpatmali plateau in Koraput, sitting at approximately 1,200 metres elevation, holds an estimated 310 million tonnes of high-grade bauxite with 40-45% alumina content. This is among the highest-quality bauxite deposits in the world.

Bauxite price at mine-gate: Rs 800-1,500 per tonne (domestic, FY 2024-25)

The price is low because bauxite, unlike iron ore, is abundant globally and has limited use outside the aluminium chain. Its value is entirely dependent on what you can turn it into.

Stage 1: The Bayer Process — Bauxite to Alumina

Raw bauxite is crushed and dissolved in a hot sodium hydroxide (caustic soda) solution at 150-250°C and 3-6 atmospheres pressure. The aluminium hydroxide dissolves; the iron oxide, silica, and titanium impurities do not. The solution is filtered, the aluminium hydroxide is precipitated, and then calcined (heated to 1,000°C) to drive off water, producing alumina — a fine white powder of Al₂O₃.

The Bayer process is well-established, moderately energy-intensive, and generates a problematic waste: red mud, an alkaline slurry containing iron oxide, silica, and residual caustic soda. For every tonne of alumina produced, approximately 1-1.5 tonnes of red mud are generated. NALCO’s alumina refinery at Damanjodi in Koraput has accumulated millions of tonnes of red mud in impoundment ponds. This is a genuine environmental liability with no fully satisfactory solution.

Alumina refining requires 2.5-3 tonnes of bauxite per tonne of alumina.

Alumina prices: Rs 30,000-40,000 per tonne (domestic, FY 2024-25, tracking global alumina prices which spiked to $700+/tonne in late 2024)

The value jump from bauxite to alumina: roughly 25-35x. This is the first major value addition, and NALCO performs it within Odisha at its Damanjodi refinery. The 2.1 MTPA refinery is one of the largest in Asia and is the single most valuable industrial asset in southern Odisha.

Stage 2: Hall-Héroult Smelting — Alumina to Metal

Here is where the energy equation dominates everything.

Alumina powder is dissolved in a bath of molten cryolite (Na₃AlF₆) at 960°C in a large carbon-lined steel pot. A massive direct current — 300,000 to 500,000 amperes — is passed through the bath. The electrical energy breaks the aluminum-oxygen bond. Aluminium, being denser than the cryolite bath, sinks to the bottom and is periodically tapped out as liquid metal. The oxygen reacts with the carbon anodes, consuming them.

The energy consumption: 13,000-15,000 kWh per tonne of aluminium.

This is the number that governs all aluminium geography. To produce one tonne of aluminium, you need to consume as much electricity as a small Indian village uses in a year. The smelter operates 24 hours a day, 365 days a year — you cannot shut down a smelting pot without destroying the frozen bath and losing months of restart time. The electricity must be continuous, reliable, and above all, cheap.

This is why NALCO smelts at Angul, not at Koraput.

The bauxite is in Koraput. The alumina refinery is in Koraput. But the smelter — the 460,000 TPA facility that converts alumina to aluminium metal — is 600 kilometres away at Angul, in central Odisha. Why? Because Angul sits next to the Talcher coalfield, which feeds the captive thermal power plant that provides the continuous, cheap electricity the smelter needs. NALCO operates a 1,200 MW captive power plant at Angul specifically to feed the smelter.

The economics are unforgiving. At an average power cost of Rs 3-4 per kWh, the electricity cost alone for one tonne of aluminium is Rs 39,000-60,000. If power costs rise to Rs 5-6 per kWh — common industrial rates in many Indian states — the smelter becomes uneconomical. Every rupee per kWh translates to Rs 14,000 per tonne of aluminium. This is why aluminium smelters globally cluster near cheap power: hydroelectric power in Norway and Canada, coal power in China and India, geothermal in Iceland.

Primary aluminium prices: Rs 200,000-230,000 per tonne (LME-linked, FY 2024-25)

The value multiplication from bauxite (Rs 1,000/tonne) to primary aluminium (Rs 215,000/tonne): approximately 200x. From alumina to aluminium: approximately 5-6x. But the energy cost consumes a large portion of the smelting margin.

Stage 3: Alloying and Fabrication — The Missing Steps

Primary aluminium ingot is a commodity. The value additions beyond the ingot stage are where margins expand:

Alloy production: Adding silicon, magnesium, copper, zinc, or manganese in precise proportions creates alloys with specific properties — high strength for aerospace (7075 series), corrosion resistance for marine applications (5083 series), formability for beverage cans (3004 series).

Extrusion: Aluminium billets are heated and forced through a die to produce profiles — window frames, structural sections, heat sinks, automotive components. Extruded aluminium: Rs 280,000-350,000 per tonne.

Sheet and foil rolling: Ingots are hot-rolled and cold-rolled to produce flat products — aircraft skin panels, lithographic plates, packaging foil. Aluminium sheet: Rs 260,000-320,000 per tonne. Aluminium foil: Rs 350,000-450,000 per tonne.

Aerospace and defense-grade products: Precision machined aluminium components for aircraft, missiles, and space vehicles command prices of Rs 500,000-1,500,000+ per tonne, depending on specification and certification.

The full value chain from bauxite to aerospace-grade fabricated aluminium: 500-1,500x.

Odisha performs two stages of this chain — mining and alumina refining (at Damanjodi) and smelting (at Angul). NALCO also has a small downstream facility producing rolled products and extrusions. But the state has near-zero presence in the high-value fabrication stages — the alloy development, precision extrusion, aerospace-grade machining, and defence-specification manufacturing that capture the lion’s share of value. Those industries are in Maharashtra, Karnataka, Tamil Nadu, and Kerala. The aluminium ingots leave Angul, and the value creation happens elsewhere.

Chromite to Stainless Steel: The 98 Percent Paradox

Here is a statistic that should stop anyone who reads it: Odisha produces 98 percent of India’s chromite ore. Nearly all of the chromite mined in the country comes from two narrow geographic zones — the Sukinda Valley in Jajpur district and the Baula-Nuasahi area in Keonjhar district. The Sukinda Valley is one of the largest chromite deposits on the planet.

And Odisha has essentially zero stainless steel manufacturing capacity.

Chromite’s primary use is in the production of ferrochrome — an alloy of chromium and iron that is the essential ingredient in stainless steel. Without chromium, stainless steel is not stainless. The chromium content (typically 10.5-30% by weight) is what forms the passive oxide layer that gives stainless steel its corrosion resistance.

The Value Chain

Stage 1: Chromite mining Chromite ore is mined, crushed, and graded. Odisha’s chromite is mostly friable (soft) ore, requiring beneficiation to upgrade chromium content.

Chromite ore price: Rs 8,000-15,000 per tonne (depending on grade, Cr₂O₃ content of 38-52%)

The dominant miner is the Odisha Mining Corporation (OMC), which operates the Sukinda chromite mines. Tata Steel’s Indian Chrome subsidiary also mines in the Sukinda Valley, as does Balasore Alloys and IMFA (Indian Metals & Ferro Alloys).

Stage 2: Ferrochrome production Chromite ore is smelted in a submerged arc furnace at 1,500-1,700°C with coke as a reductant and quartzite as flux. The product — ferrochrome — is an alloy containing 50-70% chromium and 25-35% iron, with varying carbon content depending on the grade:

High carbon ferrochrome (charge chrome): The most common grade, used directly in stainless steel production. Rs 85,000-130,000 per tonne (highly cyclical, depending on global chrome prices).
Low carbon ferrochrome: More refined, lower carbon content, used in specialty stainless steels. Higher price.

The value multiplication from chromite ore to ferrochrome: approximately 8-12x.

Ferrochrome production is the one value-addition step where Odisha has significant presence. IMFA (Therubali, Choudwar), Balasore Alloys (Balasore), Ferrochrome division of Tata Steel, and Jindal Stainless’s facility — together give Odisha meaningful ferrochrome capacity. India is among the world’s largest ferrochrome producers, and Odisha accounts for a significant share.

But ferrochrome is an intermediate product. The real value is in what comes next.

Stage 3: Stainless steel production Ferrochrome is melted in an Electric Arc Furnace along with scrap stainless steel, nickel (for austenitic grades), and other alloying elements. The melt is refined in an Argon Oxygen Decarburization (AOD) vessel — a specialized converter that blows argon and oxygen through the molten metal to reduce carbon content without losing chromium. The result is liquid stainless steel, which is continuously cast and then hot-rolled.

Stainless steel prices (FY 2024-25):

Grade 304 (18% Cr, 8% Ni, the standard austenitic grade): Rs 180,000-220,000 per tonne
Grade 316 (with molybdenum, for marine and chemical applications): Rs 280,000-350,000 per tonne
Grade 430 (ferritic, chromium only, no nickel): Rs 110,000-140,000 per tonne

The value multiplication from chromite ore (Rs 10,000) to stainless steel 304 (Rs 200,000): approximately 20x.

Stage 4: Finished stainless steel products Stainless steel flat products are further processed into:

Kitchen utensils and cookware (a massive Indian market)
Architectural cladding and elevator panels
Chemical process equipment (reactors, heat exchangers, tanks)
Automotive exhaust systems
Medical instruments and implants
Food processing equipment

Finished stainless steel products can range from Rs 250,000 to Rs 500,000+ per tonne depending on application.

Where Stainless Steel Is Actually Made

India’s stainless steel industry is dominated by Jindal Stainless — the world’s largest stainless steel company by capacity — with its main plant in Hisar, Haryana. Not in Odisha. Not near the chromite. In Haryana, a state with no chromite deposits whatsoever, 1,500 kilometres from the Sukinda Valley.

Jindal Stainless does have a facility in Jajpur, Odisha — the Jindal Stainless (Hisar) Jajpur plant — which produces ferrochrome and some stainless steel. But the primary capacity, the rolling mills, the finishing lines, the cold-rolling complex, the distribution network — all of that is centred on Hisar.

Salem Steel Plant (SAIL), in Tamil Nadu, is the other major stainless steel producer. Again, not near any chromite source.

The pattern is identical to the iron ore story. The raw material leaves Odisha. The high-value processing happens in states that have no geological advantage but do have established industrial ecosystems, logistics networks, proximity to consumer markets, and accumulated technical workforce. Odisha has 98 percent of the chromite and near-zero percent of the final stainless steel value.

Coal’s Multiple Lives: From Rs 1,500 to 100x

Coal is usually discussed as a single commodity — something you burn for heat or electricity. But coal is actually a complex hydrocarbon material that can follow multiple value paths, each with dramatically different economics.

Odisha sits on the Talcher coalfield — estimated reserves of 38.65 billion tonnes, the largest in India — and the Ib Valley coalfield extending through Jharsuguda and Sambalpur. Mahanadi Coalfields Limited (MCL), a subsidiary of Coal India, is the dominant producer, with annual output exceeding 200 million tonnes.

Pit-mouth coal price: Rs 1,200-2,000 per tonne (depending on grade, gross calorific value)

From this starting point, coal can take several very different journeys.

Path 1: Thermal Power — The Default

The overwhelmingly dominant use. Coal is burned in a pulverized coal boiler to generate steam, which drives a turbine to produce electricity. The efficiency is roughly 33-38% — meaning two-thirds of the coal’s energy content is lost as waste heat. A 1,000 MW thermal power plant burns approximately 5-6 million tonnes of coal per year.

Value per tonne of coal as thermal fuel: The electricity generated from one tonne of coal (approximately 2,000-3,500 kWh depending on grade and plant efficiency) is worth roughly Rs 5,000-10,000 at the busbar (before transmission). The value multiplication from coal: approximately 3-7x.

This is the low end of coal’s value. It is also what Odisha overwhelmingly does with its coal — burns it in thermal power plants (NTPC Talcher, NTPC Kaniha, MCL’s own washeries) or ships it to power plants elsewhere. The value created is modest, and most of the electricity revenue accrues to NTPC (a central PSU) or to the consuming states that buy the power.

Path 2: Metallurgical Coke — The Steel Ingredient

Coking coal — specific grades with low ash, low sulphur, and strong caking properties — is heated in a coke oven battery at 1,000-1,100°C in the absence of air for 16-24 hours. The volatile matter drives off as coke oven gas (itself a valuable fuel and chemical feedstock), and the remaining solid — metallurgical coke — is a hard, porous carbon structure that serves as both fuel and reducing agent in the blast furnace.

Metallurgical coke prices: Rs 25,000-40,000 per tonne (FY 2024-25, imported coking coal blends)

The challenge for Odisha: the Talcher coalfield produces predominantly non-coking thermal coal. India imports roughly 55-60 million tonnes of coking coal annually — about 85% of its coking coal requirement — primarily from Australia. This import dependency is one of the steel industry’s strategic vulnerabilities and a major reason why India’s green steel transition matters.

However, some of Odisha’s coal can be washed and blended with imported coking coal to produce acceptable coke. And the washery rejects — low-grade coal with high ash — can be burned in fluidized bed combustion boilers, adding another layer of value extraction.

Path 3: Coal Gasification — The Chemical Multiplier

Here is where coal’s true potential value emerges. Coal gasification converts solid coal into syngas — a mixture of carbon monoxide (CO) and hydrogen (H₂) — by reacting it with a controlled amount of oxygen and steam at high temperatures (1,200-1,500°C) and pressures (20-70 bar).

Syngas is the universal chemical building block. From syngas, you can produce:

Methanol: A basic chemical feedstock worth Rs 25,000-35,000 per tonne. India imports 2-3 million tonnes of methanol annually.
Ammonia and urea: For fertilizer production. Urea: Rs 30,000-40,000 per tonne (though the domestic price is subsidized).
Synthetic diesel and jet fuel: Through Fischer-Tropsch synthesis. This is how South Africa’s Sasol produces liquid fuels from coal — a technology proven at commercial scale for decades.
Olefins (ethylene, propylene): The building blocks of the plastics and chemicals industry. Through methanol-to-olefins (MTO) or direct coal-to-olefins processes. Ethylene: Rs 80,000-100,000 per tonne. Propylene: Rs 75,000-95,000 per tonne.
Hydrogen: Increasingly relevant as green hydrogen costs decline, but coal gasification remains the cheapest hydrogen route in the near term. Grey hydrogen from coal: Rs 150-200 per kg.

The value multiplication from coal to synthesized chemicals: approximately 50-100x.

From Rs 1,500 per tonne of coal at the pit-mouth to ethylene at Rs 90,000 per tonne, the multiplier is 60x. To specialty chemicals derived from coal-based olefins, it can exceed 100x.

India’s National Coal Gasification Mission aims for gasification of 100 million tonnes of coal by 2030. Odisha, with its massive coal reserves and existing mining infrastructure, is a natural location for gasification projects. Coal India has announced gasification projects at Talcher. But as of early 2026, actual operational gasification capacity in Odisha remains minimal. The coal continues to be burned for electricity — the lowest-value use of a remarkably versatile raw material.

Path 4: Coal-Bed Methane and Underground Coal Gasification

The Talcher coalfield also has potential for coal-bed methane (CBM) extraction — methane gas trapped within coal seams that can be extracted without mining the coal itself. CBM is essentially natural gas, worth Rs 25,000-40,000 per thousand cubic metres, and can serve as feedstock for both power generation and petrochemical production.

Underground Coal Gasification (UCG) takes this further — converting coal in situ into syngas by injecting oxygen and steam into the coal seam through boreholes, without ever bringing the coal to the surface. UCG could potentially access coal deposits that are too deep or too thin for conventional mining.

Both technologies remain at early stages in India. But they represent coal value paths that bypass the environmental costs of open-cast mining while unlocking chemical feedstock value that far exceeds thermal power revenue.

Manganese: The Quiet Multiplier

Manganese is the mineral nobody talks about. It lacks iron ore’s tonnage, bauxite’s drama, and chromite’s scarcity story. But it is essential to steelmaking — virtually every tonne of steel contains manganese — and Odisha holds 44 percent of India’s manganese reserves, concentrated in Sundargarh, Keonjhar, Rayagada, and Balangir.

The Value Chain

Manganese ore prices: Rs 6,000-15,000 per tonne (highly variable by grade, Mn content of 25-48%)

The primary value-addition route:

Ferromanganese: Manganese ore is smelted in a submerged arc furnace with coke, producing a ferro-alloy containing 70-80% manganese. This is added to steel during the refining stage to serve as a deoxidizer and desulphurizer, and to add strength and hardness.

High carbon ferromanganese: Rs 80,000-110,000 per tonne
Value multiplication from ore: approximately 8-12x

Silicomanganese: A variant where silica is added to the charge, producing an alloy containing 60-70% manganese and 14-20% silicon. Used in steel deoxidation and as an alloying agent.

Silicomanganese: Rs 75,000-100,000 per tonne

Electrolytic Manganese Dioxide (EMD): Produced by electrolyzing manganese sulphate solution. EMD is a critical component in alkaline batteries and increasingly in lithium-ion battery cathodes.

EMD: Rs 150,000-250,000 per tonne
Value multiplication from ore: approximately 15-25x

High-purity manganese sulphate: Used in lithium-ion battery cathodes (NMC chemistry — Nickel Manganese Cobalt). This is where manganese intersects with the electric vehicle revolution. The battery-grade manganese chain is a completely different value path from the traditional ferro-alloy route.

Battery-grade manganese sulphate: Rs 100,000-180,000 per tonne

Odisha has ferro-alloy capacity — IMFA is one of India’s largest producers of ferromanganese and silicomanganese. But the higher-value products — EMD, battery-grade materials — are produced elsewhere or imported. The emerging battery materials value chain represents a significant new opportunity for manganese-rich states, but it requires different industrial capabilities (chemical processing, high-purity refining) than traditional ferro-alloy production.

The Pattern

Lay out all five mineral value chains side by side, and the pattern is unmistakable:

Mineral	Mine-gate value (Rs/tonne)	Final product value (Rs/tonne)	Value multiplier	Odisha’s position in chain
Iron ore	3,500-5,500	70,000-90,000 (auto steel)	15-22x	Mining, some pelletization, limited steel
Bauxite	800-1,500	200,000-1,500,000 (aerospace Al)	200-1,500x	Mining, alumina refining, smelting
Chromite	8,000-15,000	180,000-350,000 (stainless steel)	15-25x	Mining, ferrochrome, near-zero stainless
Coal	1,200-2,000	80,000-100,000 (olefins)	50-80x	Mining, thermal power (3-7x only)
Manganese	6,000-15,000	150,000-250,000 (EMD)	15-25x	Mining, ferro-alloys

In every chain, Odisha occupies the first one or two stages — the stages with the lowest value multiplication and the highest environmental and social costs. The stages where margins are thinnest, where competition is most intense (because mining is the least differentiated stage), and where employment per unit of output is lowest.

The high-value stages — steelmaking and rolling, aluminium fabrication, stainless steel production, coal gasification and chemical synthesis, battery-grade materials — happen elsewhere. Not because Odisha lacks the raw materials. Not because the physics requires it (though the aluminium energy economics provide a partial exception). But because the industrial ecosystems, the technical workforces, the logistics networks, and the institutional infrastructure that high-value processing requires were built in other states during the decades when Odisha’s competitive advantage was being neutralized by central policy.

The tonne’s journey always starts in Odisha. It almost never ends there.

Sources

NMDC Limited. “Iron Ore Price Notifications FY 2024-25.” National Mineral Development Corporation, Hyderabad. https://www.nmdc.co.in
SteelMint. “India Iron Ore Prices — Lumps, Fines, Pellets.” Market data, 2024-25. https://www.steelmint.com
JSW Steel Limited. “Annual Report 2023-24.” JSW Group, Mumbai. https://www.jsw.in/steel
Tata Steel Limited. “Integrated Report and Annual Accounts 2023-24.” Tata Steel, Mumbai. https://www.tatasteel.com
NALCO (National Aluminium Company Limited). “Annual Report 2023-24.” NALCO, Bhubaneswar. https://nalcoindia.com
Indian Bureau of Mines. “Indian Minerals Yearbook 2023.” Ministry of Mines, Government of India. https://ibm.gov.in
IMFA (Indian Metals & Ferro Alloys Limited). “Annual Report 2023-24.” IMFA, Bhubaneswar. https://www.imfa.in
Jindal Stainless Limited. “Annual Report 2023-24.” Jindal Stainless, New Delhi. https://www.jindalstainless.com
Ministry of Coal, Government of India. “National Coal Gasification Mission — Overview.” https://coal.gov.in
Mahanadi Coalfields Limited. “Annual Report 2023-24.” MCL, Sambalpur. https://www.mahanadicoal.in
London Metal Exchange. “LME Aluminium Official Prices 2024-25.” https://www.lme.com
International Aluminium Institute. “Primary Aluminium Smelting Energy Intensity.” https://international-aluminium.org
SAIL (Steel Authority of India Limited). “Annual Report 2023-24.” SAIL, New Delhi. https://sail.co.in
ICRA Limited. “Indian Steel Industry — Outlook and Credit Perspective.” ICRA Research, 2024. https://www.icra.in
CRISIL Research. “Indian Ferro Alloys Industry Report 2024.” CRISIL, Mumbai. https://www.crisil.com
CRU Group. “Steel Cost Model — India.” CRU International, London. https://www.crugroup.com
Ministry of Mines, Government of India. “Mining in Odisha — State Profile.” https://mines.gov.in
Federation of Indian Mineral Industries (FIMI). “Statistics — Indian Mining Industry.” https://www.fedmin.com
International Energy Agency. “Coal 2024 — Analysis and Forecast.” IEA, Paris. https://www.iea.org
World Steel Association. “Steel Statistical Yearbook 2024.” https://worldsteel.org

Source Research

The raw research that informs this series.